Government view: scale and relative success
Union Minister of Commerce and Industry Piyush Goyal on December 14, 2022, told the Lok Sabha that startups are inherently prone to failure, but added that the success rate of startups in India is “relatively higher than the rest of the world.” As of the end of November (2022), India had 84,012 recognised startups, he said.
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Marking 10 years of Startup India on January 16, Goyal said the ecosystem has crossed a major milestone, with over 2 lakh DPIIT-recognised startups in the country and more than 50 new startups being recognised every day. These startups have generated over 21 lakh jobs, and India is now the third-largest startup ecosystem globally, backed by cumulative funding of ₹15 lakh crore. He attributed the growth to policy reforms aimed at reducing bureaucratic hurdles and encouraging innovation and scale.
Failure debate and the reality check
Despite the scale, concerns around failure rates persist. A 2017 IBM-sponsored study, stated that nearly 90% of Indian startups fail within the first five years. Experts noted that while some startups had little chance of survival, many failed due to one-off circumstances or poor risk management despite having viable models and good technology.
This contrast between headline growth and high failure rates continues to shape the debate on how mature the ecosystem truly is.
Funding trends: Capital becomes cautious
According to data shared by Tracxn, Indian startups raised $11.2 billion in funding in 2025, an 11.1% decline from $12.6 billion in 2024. The moderation reflects global macroeconomic uncertainty, tighter liquidity and a sharper investor focus on capital efficiency and profitability. Large-ticket funding rounds have become more selective, with capital increasingly flowing into sectors that offer clearer long-term visibility.
However, certain segments recorded sharp growth. Aerospace, maritime and defence tech saw an 80% increase in funding in 2025 compared to the previous year, followed by real estate and construction tech at 76.8% and environment tech at 53.5%. Tracxn attributed this to rising government spending, strategic importance, sustainability goals and regulatory push toward decarbonisation.
Neha Singh, Co-founder, Tracxn , said, “Capital is increasingly flowing toward sectors with clearer policy tailwinds, longer investment horizons, and enterprise or infrastructure-led demand, while consumer-heavy and platform-driven sectors are experiencing a reset. This shift reflects a maturing ecosystem where growth is less broad-based and more concentrated around areas with perceived long-term resilience and strategic relevance.”
Seed to series A: A narrow funnel
Tracxn data also highlights the steep filtering that occurs as startups scale. Of 8,996 companies that raised seed-stage funding, only 2,483 progressed to Series A or Series B rounds, translating to a progression rate of about 27.6%. The key factors influencing progression include product-market fit, early revenue traction and the ability to demonstrate scalable unit economics, as investors become more disciplined in follow-on funding decisions.
Technology startups and global standing
In terms of global positioning, India ranked third in total startup funding in 2025, behind the US and the UK, and ahead of China, Germany and France. Experts say this reflects resilience rather than hyper-growth. While consumer internet and e-commerce players continue to raise capital selectively, funding momentum is increasingly visible in enterprise technology, fintech, climate-linked sectors, logistics and infrastructure-aligned businesses.
This trend also feeds into last year’s debate triggered by Piyush Goyal’s comments on the need for more deeptech and innovation-led startups, rather than an over-reliance on consumer platforms.
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Founders’ view: Profitability and Bharat focus
CarDekho Group co-founder and CEO Amit Jain said the ecosystem has shifted toward first-principles thinking, with startups increasingly balancing profitability and sustainable growth. He noted strong momentum in mobility, emerging technologies, AI, deeptech, SaaS and fintech, and pointed out that India now houses around 30,000 tech startups.
Jain also highlighted that entrepreneurship is expanding beyond metros, with a significant share of startups emerging from Tier 2 and Tier 3 cities, supported by incubation centres, accelerators and greater visibility through platforms such as Shark Tank.
Investor perspective: Diversification and discipline
Rukam Capital founder and managing partner Archana Jahagirdar said India’s startup growth is now far more diversified than a decade ago, when capital was concentrated largely in consumer internet and fintech. While these sectors continue to scale, SaaS, enterprise tech, healthtech and climate tech are emerging as structurally strong growth areas.
She also pointed to changing consumption patterns in non-metro India, where discovery is increasingly video-first and research-led, pushing startups to focus on affordability, vernacular adoption and offline distribution. Jahagirdar said the ecosystem is clearly moving away from “growth at all costs” to capital-efficient, problem-led businesses with clearer paths to profitability.
In words of Manas Pal, Co-founder, PedalStart, “The ecosystem is no longer about experiments. It is about building serious companies that can survive cycles and create real economic value.”
Deeptech and long-term bets
GrowX Ventures general partner Manish Gupta said that while technology startups continue to grow faster than traditional sectors, capital is now chasing technology depth, defensibility and long-term relevance rather than scale alone. He pointed to growing interest in AI infrastructure, deeptech, spacetech and advanced manufacturing, even as these sectors take longer to build.
NSRCEL CEO Anand Sri Ganesh echoed this view, noting increased interest in tech-embedded business models across robotics, drone-tech, biotech and life sciences. He said founder mindsets are maturing, with greater emphasis on governance, unit economics and sustainable scale, while investors are becoming more cautious and deliberate in their engagement.
A decade on
Ten years after Startup India was launched, the ecosystem stands at a crossroads. While headline numbers point to scale and global relevance, funding data and expert views suggest a phase of recalibration — one where growth is slower, more selective and increasingly aligned with long-term resilience rather than rapid expansion alone.